[VIEWPOINT]Strike alternatives necessary

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[VIEWPOINT]Strike alternatives necessary

As management and labor of Hyundai Motor Co., Korea’s largest carmaker, have come to a temporary agreement on collective wage negotiations, strikes at automobile companies seem to have entered a settling phase.
In fact, despite the two largest umbrella unions’ taking extremely offensive political actions, including their proposed absence from the next general meeting of the International Labor Organization, management and labor relations in industrial sites this year have shown stability as the number of disputes halved from that of the same period last year. Nevertheless, habitually recurring strikes in the car industry make us think about many things.
Carmakers are representative workplaces that pay high wages, along with the provision of excellent welfare benefits. The wage level of domestic carmakers exceeds that of General Motors Co. in terms of real purchasing power and is approaching that of Ford and Toyota. Despite this high wage level, the labor unions of automobile makers have made strikes annual events which cause huge damage throughout the entire industry, including serious managerial crises at small- and medium-sized sub-contractors.
It is not right to stage strikes annually in an industry where, due to global competition, only the world’s three to five largest carmakers will reportedly survive. Although local carmakers have managed to survive to date, the chronic disease of strikes is highly likely to deliver a fatal blow in the future.
It is said that in management-labor relations, workers may be weak but the labor unions are not. The labor unions of large companies have become groups with a huge amount of power. It is excessive infringement on personnel management for labor unions to demand that management get their consent even on matters such as reducing the amount of domestic production in the car business, or building overseas factories.
The argument that a substantial part of net income should be paid to workers is also a demand that can seriously undermine the long-term competitiveness of businesses by shrinking their investment in research and development.
The problem is that even if labor unions threaten to stage strikes over unreasonable demands, employers do not have many measures to cope with the threat. Once the labor unions start strikes, businesses have no option but to suffer enormous damage from halted production and lost sales. They are forbidden from replacing workers on strike with those from outside, and cannot use “dispatched workers” ― meaning the employees of subcontractors.
On the other hand, in many cases, the labor unions actually receive compensation for wages lost during the strike, under various names such as production incentives, even if the strike lasts a long time. It is natural that employers should yield to the unions’ one-sided demands in such negotiations. The law prohibits the payment of wages during the dispute but in reality it is not possible to do so. If there is no change in these unfair negotiation practices, it is hard to expect a change in the unions’ negotiation tactics next year.
According to the International Institute for Management Develop-ment, Korea was the lowest ranking, for the second year straight, among 60 countries in the category of hostility between labor and management. Our country came to be dishonorably called the “Republic of strikes” largely because labor unions of large companies transformed into groups that wield great power and exhibit behavior that deviates from the original goal of labor movements.
Now the unsound negotiation tactics of staging strikes as annual events should be discontinued. The problem of the unions of large companies, that resort to strikes in every matter, has now exceeded a level which individual companies can solve. To solve this problem, administrative support and legal and institutional improvement are needed. Requirements for strikes should be strengthened so they will be the last resort, not a routine means to put employers under pressure, and options for employers to mobilize should be expanded once a labor union has started a strike.
Along with this, the government should prevent the annual repetition of extreme disputes between labor and management, which focus on confrontation and strife because wage increases depend on the unions’ negotiation ability alone. The government should also provide objective guidelines for the criteria for wage increases and prepare measures to apply wage agreements over many years. Even so, the fact that among collective wage negotiations of Hyundai Motor, this year’s strike period was the shortest and the amount of loss the least since 2000 gives some comfort.
The automobile maker looks humble, however, compared to its counterparts in advanced countries where, despite record high profits, wages are frozen for many years and working hours extended without an additional raise in wages.

* The writer is the president and CEO of the Korea Chamber of Commerce and Industry. Translation by the JoongAng Daily staff.

by Kim Sang-yeol
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